What to do if you’re moving during a pandemic?
Moving house or business premises can be stressful at the best of times, let alone doing it in the middle of a pandemic. To assist you in this situation, we have set out the key practicalities to consider if you are moving during the current crisis.
Buying or selling a house
If you’re buying or selling a house you will often be told that the aim is to complete within 8 weeks of the contract being received. You will also be told that the timings can be dependent on a number of factors, such as mortgage offers, surveys and the number of parties in the chain. However, since March, coronavirus is likely to be your main worry in relation to conveyancing.
There are a number of elements of the selling and purchasing process that could be held up due to the pandemic, some more of a road block than others:
If your property is on the market then you will encounter real difficulty in arranging viewings given the current lockdown. You may be able to conduct virtual viewings of the property, but it is likely that a buyer would want to view the property in person before making an offer.
If you’re using a mortgage to purchase a house, or selling your house to a buyer using a mortgage, there could be a delay depending on what stage of the lending process has been reached. Many lenders are currently reviewing their mortgage products and limiting the offer of new mortgages. Make sure you check with your mortgage broker to see if any lender policy changes apply to you.
In the current circumstance it is advisable for the contract to contain provisions relating to coronavirus. As the contract is legally binding, when exchange has taken place, completion will have to occur on the date stated or there will be a breach of contract. The party responsible for the breach would be in default, which can result in financial penalties or even the loss of a deposit. This is covered in more detail below.
The contract should contain provisions dealing with, for example, what will happen if completion cannot take place due to a party having coronavirus or self-isolating. This is particularly necessary where the property is occupied by the seller because, if the occupier is self-isolating, they will not be able to leave the property on the completion date.
Government guidance for exchanging contracts states that, if the property is occupied, the parties should either:
- work to delay the exchange of contract until after the stay at home measures are lifted; or
- ensure the contract has adequate clauses to protect all parties from the risks due to coronavirus.
If the property is unoccupied the government has stated that you can continue with the transaction.
There are a number of reasons why exchange of contracts could be delayed. For example, the parties are unable to sign the contract and post it to the conveyancer, the purchaser is unable to send the deposit fund to their conveyancer or the conveyancers are unavailable due to coronavirus stay at home measures or self-isolation.
It is currently recommended that you delay moving into a new house whilst coronavirus measures are in place. However, if contracts have been exchanged and the move does need to take place, it should be subject to current public health guidelines:
- the occupiers do not have (or suspect that they have) coronavirus;
- none of the occupiers are in a state of isolation; and
- all parties abide by social distancing requirements.
If public health guidelines can be followed so completion can take place, the keys will then be released to the buyer. It is usual practice for the keys to be held by the estate agent. If the estate agent’s office is closed it may not be possible for the keys to be released and other arrangements will need to be made. A failure by the seller to provide keys to the buyer will be a breach of contract.
Government guidance is that removal companies should honour contracts where the move can be done safely for clients and staff and the moving date cannot be changed. Given the circumstances, it may therefore be difficult to obtain the services of a removal company.
Your contract may contain provisions for dealing with the effects of coronavirus, in which case the position should be relatively clear. However, if your contract does not contain coronavirus provisions, it may be possible to change the terms of the contract post exchange if completion cannot take place, but all parties would need to agree to this. If one party is unwilling to do so the defaulting party will be in breach of contract.
What happens if I cannot move?
The impact of this depends on which party cannot complete. Both parties may agree to delay completion if they are equally affected, in which case the contract should be amended to reflect the new arrangements. Where there is a chain this can be more problematic, however, and it is likely that a party linked to a chain would be unable to delay completion.
If the seller cannot complete, the buyer is entitled to claim damages for any costs incurred due to not being able to take possession. These can include storage and rental costs and will attract interest based on the contract rate.
If the buyer cannot complete, it is the seller who has the claim for damages. The seller can claim for any losses they have experienced due to the breach of contract. If the seller withdraws, due to the buyer being unable to complete, then they are entitled to claim the deposit, which is normally 10% of the purchase price. If the seller is unable to sell the property for the same value, the seller could claim the difference from the defaulting buyer as damages.
Moving business premises
Many of the considerations for moving into a new home will be relevant for a business move, particularly the exchange and completion aspects. It is vitally important that clauses are added to any new contract to govern the impact of coronavirus.
It is often the case that a new business premises needs to be renovated before a new business can move in. Whether this is adding new walls for offices, or a complete overhaul to make the space work for your business, it is likely in the current outbreak that building works cannot go ahead due to difficulty maintaining social distance in such circumstances. This could delay your move until after the stay at home measures are lifted if contractors cannot carry out necessary works.
With many employees working from home, or on furlough leave, it may be that you are delaying your move to a new premises. It would be sensible for the solicitors to continue dealing with the transaction so that you can move as quickly as possible when the coronavirus measures are lifted.
If the coronavirus pandemic has halted your moving plans and you need further help and advice please get in touch with Jake Sandbach on 01454 800008 or by email firstname.lastname@example.org.
The information in this article is provided for general information purposes only. It should not be considered legal advice and you should not rely on this information in making any business, legal or other decisions. MS Rubric shall have no liability to you in respect of the information contained in this article, without limitation, including arising by any breach of contract, arising by tort (including, without limitation, the tort of negligence or negligent misstatement) or arising by a breach of statutory duty.